Stocks edged lower throughout Asia on Tuesday following the lead of US markets while the dollar found support on suggestions Japan’s central bank might act to ease monetary policy and push down the yen.
Currency markets also remained anxious about the prospects for new Japanese intervention and gold held near record highs.
US and European stock markets dipped as investors grew nervous after four weeks of gains and increasingly wary of European debt challenges, particularly those facing Ireland and Portugal.
Japan’s Nikkei average .N225 fell 0.6 percent, dropping as the deadline passed for investors to receive dividends on Tokyo stocks for the financial half year.
The yen hovered for a time near its highest level since Tokyo’s heavy intervention two weeks ago to sell the currency and depress it.
But sources said the Bank of Japan was considering whether to ease monetary policy further though it could delay action pending a consensus on how to keep economic recovery on track.
Talk of easing was having an effect as was the constant possibility of intervention.
“The market consensus is now that there won’t be endless yen strengthening, that if the dollar falls below 84 yen authorities are likely to intervene,” said Kenichi Hirano, operating officer at Tachibana Securities.
Korean stocks .KS11 dipped 0.31 percent, while Australian stocks .AXJO were virtually unchanged.
Despite this month’s gains, Tokyo stocks rose only some 1.6 percent this quarter, lagging other major stock markets. The S&P 500 has gained more than 10 percent this quarter, while South Korean shares have risen some 9.3 percent.
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